America's watchdog can bite

The US Securities and Exchange Commission (SEC) was created in 1934 as an independent, quasi-judicial regulatory agency to administer US securities laws. These laws seek to protect investors in securities markets, ensure that the markets operate fairly and guarantee investor access to important information about publicly traded securities. The SEC also regulates firms that buy and sell securities, investment advisers and investment companies.

At full strength the SEC has five commissioners appointed by the President, with the consent of the US Senate, for five-year terms. The chairman is also appointed by the President.

There are five principal SEC divisions. The enforcement division investigates possible violations of securities laws and recommends action. The corporate finance division ensures that disclosure requirements are met by publicly held companies. The market regulation division oversees the securities markets and brokerage firms, and regulates trading and sales practices. The investment management division oversees investment company and adviser sales practices and financial responsibility. The office of compliance inspections and examinations inspects all stock markets, brokers, and investment companies and advisers.

In the last two years the SEC has taken several major administrative actions and worked closely with Congress to bring about significant changes in US securities laws.

In August the SEC censured the National Association of Securities Dealers, an industry body that runs the Nasdaq stock market and polices all US brokers. The SEC charged the NASD with turning a blind eye to dealer trading violations on Nasdaq. The NASD agreed to settle these charges by spending an extra $100m (pounds 60m) on enforcement in the next five years.

In January 1996, the SEC filed its first-ever suit against a city or county for municipal bond violations when it charged Orange County, California, with disclosure fraud in connection with its $1.7bn bankruptcy. The county, in settling these charges, agreed to be subject to stiffer sanctions if it commits similar violations again.

In March 1996, a broad SEC examination of small and mid- sized brokerages found serious deficiencies in sales practices, hiring and supervision at more than 100 firms. The SEC can impose fines and work prohibitions against accountants, brokers and corporate officers.

The commission can also refer cases to the Justice Department for criminal prosecution, which can lead to prison terms. The SEC initiated 453 enforcement actions last year, imposed $67m in fines and ordered restitution totalling $325m.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
This weekend's 'Big Hero 6' by Disney Animation Studios
arts + ents
News
i100
News
Budapest, 1989. Sleepware and panties.
newsDavid Hlynsky's images of Soviet Union shop windows shine a light on our consumerist culture
Arts and Entertainment
Eleanor Catton has hit back after being accused of 'treachery' for criticising the government.
books
News
In humans, the ability to regulate the expression of genes through thoughts alone could open up an entirely new avenue for medicine.
science
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee